IPO Book-Building Reform,Offline Institutional Investors’ Behavior In The Process Of Quotes And The IPO First-Day Returns

Both in the western mature capital market and the emerging capital market, the issue of IPO underpricing exists in long-term and widespread, but it is more serious in China Stock market. It is paid great attention in academia and practice. At the same time, domestic literature study on the efficiency of IPO pricing focused on the difference before and after the inquiry or the Offline Institutional Investors’ Behavior in a particular stage, but made less attention to combine IPO Book-Building Reform with Offline Institutional Investors’ Behavior to analyze the efficiency IPO pricing or the differences of Offline Institutional Investors’ Behavior in the different stages.Therefore, based on the perspective of Offline Institutional Investors’ Behavior in the process of quotes, this paper studies the differences of Offline Institutional Investors’ Behavior with the IPO Book-building Reform development and analyzes its effect on the IPO first-day returns. We find Offline Institutional Investors’ Behavior impacts significantly the IPO underpricing. Specificly, if Offline Institutional Investors compete with each other, the more serious they compete, the lower IPO underpricing is. If Offline Institutional Investors conspire with each other, the more serious they conspire, the higher the IPO underpricing is. However, Offline Institutional Investors’ Behavior is different in different stages. During the third to the fourth Reform, compared with the second to the third Reform, the competition among Offline Institutional Investors is not significantly reduced, the result is that the IPO underpricing does not increases obviously. However, when the IPO’ company is small or low growth, the competition among Offline Institutional Investors is significantly reduced so that the IPO underpricing rate increases obviously. After the fourth Reform, compared with the third to the fourth Reform, we find that Offline Institutional Investors does not compete instead they conspire with each other so that the IPO underpricing rate increases obviously. At the same time,the stock shares which is made over to investors by shareholders have a lower IPO underpricing rate than those is not made over to.